More selling pressures for oil came from the rise in the U.S. dollar on Fed rate hike fears, as the U.S. dollar index jumped 0.84% this week, and a Reuters report on Friday that Iran's August crude oil exports jumped 15% from July, to more than 2 million barrels per day (bpd), the highest level since 2012.
The EIA weekly U.S. oil inventory report on Wednesday showed a decrease of 600,000 barrels to 510.8 million barrels, excluding the Strategic Petroleum Reserve, in the week ending September 9, compared to S&P Global Platts analysts’ expectations for a rise of 3.3 million barrels. The American Petroleum Institute (API) inventory data on Tuesday showed a U.S. crude inventory increase of 1.4 million barrels.
Separately, the EIA said the weekly U.S. crude oil production increased by 34,000 bpd for the week ending September 9, 2016, to 8.493 million bpd. Weekly U.S. crude oil output has fallen about 11.62% from the peak level of 9.61 million bpd during the week ending June 5, 2015. Houston-based oilfield services company Baker Hughes Inc. said on Friday that the U.S. oil rig count rose by 2 to 416, compared to 316, when the rig count hit the low on June 6, 2016.
Overall, U.S. economic growth remains a mixed bag. On Thursday, the Federal Reserve Bank of Atlanta knocked off another 30 basis points from its third-quarter 2016 GDP forecast, to 3.0% from the previous 3.3%, after the U.S. Department of Commerce said core retail sales excluding automobiles, gasoline, building materials and food services, came in at -0.1% for August, missing the analysts forecast of a 0.2% gain on a month-on-month basis.
The Federal Reserve Bank of New York is less optimistic about the U.S. economy and put its forecast at 2.8% and 1.7% for the third- and fourth-quarter 2016, respectively. The blue chip consensus U.S. GDP 2016 forecast currently is 1.8%, and that is very tepid.
The U.S Bureau of Labor Statistics, Department of Labor, said on Friday that the core CPI rose 0.3% in August, compared to a forecast of a 0.2% increase, as housing and medical costs continued to rise. Although the Fed doesn’t use CPI data and relies mostly on the personal consumption expenditures
(PCE) measure instead, the market sold off while the U.S. dollar index jumped 0.79% on Friday.